Financial Decision Making

Topics: Finance, Bond, Economics Pages: 13 (2179 words) Published: August 1, 2013
Educating Young People Who Will Be
Significantly Different!

Achievement Standard: 90981
Make a financial decision for an individual or group

Resource reference: Accounting 90981 (1.6)

Credits: 3

Student instructions sheet
Introduction
This assessment task requires you to:

• Collect printed and/or electronic data (and provide details of your sources)

Your data must be collected from secondary sources (e.g. Internet research, brochures, newspapers, magazines etc) but you may also choose to include information from primary sources (e.g. an interview with a bank officer or a car sales manager)

• Prepare a cash budget comparing at least two finance options using relevant financial and relevant non-financial information

Financial information must be linked to the financial decision and could include: • relevant costs
• cash budget
• interest rate alternatives

• Prepare a report which will be in an appropriate form (an appropriate form may a computer-aided presentation, a written report, a film clip (perhaps similar to the TV programme Target), a magazine article for inclusion in a publication like Consumer, or some other form of presentation. Discuss your ideas with your teacher to obtain final approval.

This task will require some class time and some out of school time.

Your investigation sources and/or data and a signed cover sheet should be handed in with your report or after your presentation. These will not be assessed but are used to confirm authenticity of the collected data.

Due Date: __________________________________

This activity has three parts:

Part A Collect secondary (and possibly primary) data
Part BPrepare cash budget
Part CPrepare a report

Scenario

You have now completed your Business Management degree and are about to start your first job. You will need a car to get to and from work. You have saved $2,000 from your last holiday job. Your family has agreed to guarantee any loan with a bank or finance company on the condition that you do not spend more than $20,000 on the car.

The purpose of this assessment is to research two options for financing the purchase of your first car.

You are not required to purchase two cars. Choose one car within your price range and then research two ways to finance the payment of the amount owing in addition to your $2,000 deposit.

PART A Collect secondary (and possibly primary) data relating to two financing options for a car purchase

Resource A and Resource B may assist you with this section of the assessment activity. The following example table may help you brainstorm ideas about sources of information relevant to your car purchase, other associated costs to allow you to complete a cash budget, and other information that will influence your finance option decision.

IDENTIFICATION OF POSSIBLE INFORMATION SOURCES

| | | |SOURCES OF INFORMATION |TYPE OF INFORMATION EXPECTED | |Automobile Association |This will help with information about estimates of car running costs| | |and comparisons of car insurance costs. | | |Have run car for years and know all the different costs involved in | |My Parents |running cars | |My parents |Can tell me which loan companies may treat me unfairly if I am late | |...
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